Organic Broadcaster

Dairy farmers face an uncertain future with retail sales down, contract cuts, and an industry-wide surplus of fluid milk. Photo by Brittany Olson

Organic dairy, like conventional, facing tough times

By Brittany Olson, Dairy Star

With another year of depressed farmgate milk prices looming on the horizon, and several dozen dairy farmers having their worlds turned upside down when told they no longer had a buyer for their milk, many dairy farmers have felt their burning desire for change turn into a raging fire. While organic dairy farmers typically enjoy a much higher pay price compared to their conventional counterparts, they, too, have seen their pay prices being whittled down over the past 18 to 24 months.

Darin Von Ruden, an organic dairy farmer from Westby, Wis., MOSES board member and president of the Wisconsin Farmers Union, offered some insights into the situation on the organic side.

“Up until about two years ago, organic prices have been stable,” Von Ruden said. “But, we’re now seeing more of corporate America creeping into the pricing structure with large operations like Aurora Organic Dairy in Colorado. Dean Foods is also becoming a big player in organic, but they prefer to buy from a few larger farms instead of smaller to mid-sized family farms, and the farmer pay price is being eroded. There are also larger farms coming into organic that may not follow standards to a T the way a smaller farm would, either.”

While pay prices are vastly different even with downward pressure on markets, Von Ruden said that organic and conventional are basically headed down the same road. Retail sales of organic milk dropped more than 2.5% in the last year while sales of plant-based milk options rose nearly 3%, leaving the organic dairy sector trying to manage oversupply. Von Ruden took a staggering $7/cwt pay cut at the beginning of 2018.

“Five years ago, you still had processors looking to take on new farmers. Now, the marketing structure is full and processors aren’t looking for new farmers. In past years, organic processors were able to pay farmers during transition years, but those funds have dried up and making the transition from conventional to organic hasn’t been as enticing,” he explained. As a member of Westby Cooperative Creamery, Von Ruden is now under a quota system to try to keep supply matched with demand and plant capacity.

“We can now only ship as much milk as we did last year,” Von Ruden said. “We got a letter with our contracts at the beginning of the year not only talking about the pay price cut, but also the new quota.”

The dairy crisis has been a deeply personal one for Karyn Schauf, a retired dairy farmer from Barron, Wis., and for every other dairy farmer who has basically been in survival mode since prices declined in 2015. Schauf, who owned and operated the world-renowned Indianhead Holsteins with her husband, Bob, watched as each and every one of their cattle from the oldest milking cow down to the youngest heifer calf was led through the sale ring last April.

“If we don’t do something for traditional family farms, we may very well end up like western Minnesota with little ghost towns,” Schauf said. “Industries have always had their cycles, but this one is wearing long.”

Schauf, who is also the president of the Barron County Farm Bureau, noticed at listening sessions held across the country to find some sort of solution to the dairy crisis, those most impacted—farmers—were not able to lead the conversation. After speaking with the rest of the bureau’s board of directors, many of whom are either dairy farmers or have ties to the industry themselves, they got the idea to hold a farmer-led dairy discussion.

“We reached out to our county Farmers Union chapter, and they wholeheartedly supported going along with us and sponsoring this meeting,” Schauf said. “We committed to the farmers that would attend that we would forward what was heard that day to the decision-makers in charge, and I worked hard to find the right people to invite to this meeting.”

The meeting, which took place April 16 at the Barron Electric Cooperative, involved farmers and elected officials, cooperative staff and leaders, lenders, and agribusinesses. Sam Nelson, a retired dairy farmer from nearby Prairie Farm, Wis., moderated the meeting.

When a historic April blizzard came crashing in the weekend before the meeting, organizers worried that attendance might take a hit. Some also worried that, given the hardships many were going through as a result of poor milk prices, the meeting would be nothing more than pointing fingers and playing the blame game. They were pleased to have a full room with more than 90 participants. The conversation and suggestions were enlightening, at turns emotional, and altogether positive.

Barron County Farmers Union President Dale Hanson asked how many farmers knew someone who was denied a loan to purchase crop inputs for spring planting. Many hands went up. Hanson then asked if the attendees knew a farmer who was struggling with anxiety, depression, or any other form of mental illness as a result of the stress caused by low prices. Nearly every single hand in the room went up.

Dairy farmer Sam Olson of Dallas, Wis., suggested changing regulations at the federal level to allow checkoff monies, mandatorily deducted at a rate of $0.15/cwt, to go toward more than just dairy food consumption research and uses. Olson pointed out that dairy products imported into the United States are subject to a checkoff rate at half that of domestically produced milk.

“They directly compete with our products, and should be subject to the same amount of checkoff deductions if not more,” Olson said.
John Peterson of Schuman Cheese, and formerly of Lake Country Dairy, a local processor in Turtle Lake, Wis., stated that while Lake Country Dairy mainly worked with a handful of large farms in the area, something had to be done to preserve smaller, traditional family farms.

“Farmers are the original entrepreneurs and bring money to the local economy,” Peterson said. “There are dangers to the national food supply with a [consolidated] system of only large farms. Larger farms are dependent on migrant workers, and we can’t risk losing the backbone of our local communities.”

Several farmers advocated for some kind of supply management. “Our system doesn’t have to be like Canada’s but something has to be done,” said Adam Place of Clayton, Wis. “Farmers need to take a stand and push together for the survival of family farms.”

At the end of the meeting, Schauf asked how many of the farmers were in favor of some form of supply management or a quota. A cautious majority, but a majority nonetheless, raised hands.

Discussion has continued after the meeting in Barron, not only locally but also at the state level. Both Wisconsin Farmers Union and the Wisconsin Farm Bureau Federation are working with staff and members to see what kind of solution can be brought forward.

“There is hope that something will come of this meeting, and people are still talking about it,” Schauf said.

While there is no silver bullet to subdue the many-horned beast that the dairy industry has become in the past several decades, many if not all dairy farmers agree that something has to be done in order to keep the dairy industry from becoming consolidated and vertically integrated like conventional poultry and pork production.

Brittany Olson is a dairy farmer from Chetek, Wis. She writes for Dairy Star and freelances to other publications.

 

 

 

From the May | June  2018 Issue

Read more stories from current Broadcaster.

 

Comments are closed.